You formed a French company with a partner, fifty-fifty. You live in London, New York, Dubai or Singapore; your partner lives in France and runs the day-to-day business. One morning, the cooperation stops: your partner refuses to approve the accounts, blocks the capital increase the company needs to survive, or votes against the contract that keeps your main client. Every decision requires both of you, and one of you keeps saying no. From abroad, you feel powerless — yet French law gives the blocked shareholder a precise set of tools, from the court-ordered buyout to the forced sale of shares and, as a last resort, the dissolution of the company by a judge. This guide explains each of them, with the exact legal texts and court decisions that govern your situation.

French company law starts from a simple idea: a company is a contract between people who agree to work together, and no shareholder can use a blocking minority — or an equal half — to strangle the company for personal gain. When two shareholders each hold half of the capital, every collective decision can become a hostage situation. The courts call the abusive use of this veto an abus d’égalité (abuse of equality), the twin of the better-known abus de majorité (abuse of majority). If you are setting up the structure, read first our complete guide to setting up a company in France as a foreign founder, which covers the choice of vehicle, the bank account, the Kbis (the official company identity certificate issued by the greffe, the court registry) and VAT. This article takes over where that guide stops: your company exists, it is blocked, and you need to break the deadlock from abroad.

I. Your 50/50 French Company Is Blocked: How to Prove the Deadlock and Force a Decision From Abroad

A. How Do You Prove an Abuse of Equality When Your Partner Blocks an Essential Decision?

Before asking a judge for anything, you must characterise what is happening. A disagreement is not enough. French courts distinguish sharply between a legitimate difference of views — which never justifies a sanction — and an abuse of the veto, which opens the door to damages and to forced solutions. The leading decision is a judgment of the Commercial Chamber of the Court of Cassation (Cour de cassation, the supreme court for civil and commercial matters) of 21 June 2023, no. 21-23.298, rendered in a dispute between two equal shareholders of a simplified joint-stock company (société par actions simplifiée, known as a SAS, the most flexible French company form). One of the two shareholders had refused to vote for a transitional contract with the company’s main client, a decision presented as essential to the survival of the business. The Court stated the applicable rule as follows:

Under this decision, an abuse of equality is made out where a fifty-fifty shareholder blocks, by a negative vote, a transaction the company genuinely needs, in order to advance personal interests to the harm of the other shareholder.

Three elements must therefore come together, and you must prove each of them with documents, from wherever you live.

First, the blocked operation must be essential for the company, not merely useful or profitable. Renewing the contract that represents most of the turnover, approving a capital increase without which the company cannot pay its debts, or authorising the sale of an asset that is losing money every month are typical examples. A decision that would simply have made more money, or that reflects one business strategy against another, does not qualify. Your lawyer will therefore start by assembling economic evidence: the share of turnover attached to the blocked contract, cash-flow forecasts showing the wall the company is about to hit, letters from the bank or from suppliers, and any report from the statutory auditor (commissaire aux comptes) if the company has one. Distance is no obstacle here: these documents can be collected by email and through your online access to the company’s accounts, and your partner cannot lawfully cut off your right to company information simply because you live abroad.

Second, the blockage must result from a negative vote or an abstention attributable to your partner. This sounds obvious, but the 2023 decision shows why it matters: the Court of Cassation also quashed the appeal judgment for failing to answer arguments based on a specific email that identified which shareholder had voted against the resolution, holding that the court had violated the duty to give reasons for judgments. In practice, this means the minutes of the shareholders’ meeting (procès-verbal d’assemblée générale) are the decisive document. If your partner controls the meeting process in Paris while you attend by video conference, insist that the minutes record the exact direction of each vote, and keep every email in which your partner announces the refusal. If no meeting is even convened, keep the written requests you sent asking for one: a shareholder who prevents the meeting from happening at all is in a weaker position than one who votes no on the record, but you still need the paper trail showing that you tried.

Third, the negative vote must have been cast with the sole aim of favouring the voter’s own interests at the expense of the other shareholder. This is the hardest element, because judges will not punish a shareholder who sincerely believed the decision was bad for the company. Evidence of an ulterior motive can take many forms: your partner diverts the blocked contract to a personal company, as the plaintiffs alleged in the 2023 case by invoking a breach of the duty of loyalty alongside the abuse of equality; your partner demands a personal payoff in exchange for the vote; or your partner systematically votes against everything you propose while pushing through decisions that benefit only one side. Contemporaneous written evidence — messages, competing offers, parallel company filings at the trade and companies register (registre du commerce et des sociétés, the RCS kept by each greffe) — carries far more weight than after-the-fact reconstructions.

One defence must be anticipated, because the losing party raised it in the 2023 case and will raise it in yours: that by choosing an equal capital structure with unanimity for every decision, both shareholders accepted the risk of a deadlock, including the disappearance of the affectio societatis (the shared intention to work together as partners). The Court of Cassation rejected this defence squarely, holding that reasoning based on the unanimity rule is incapable of excluding the existence of an abuse of equality and deprived the appeal decision of any legal basis. Choosing fifty-fifty is never a licence for your partner to abuse the veto. If the three elements are met, you can claim damages for the loss suffered — lost profits on the blocked contract, the cost of emergency financing, or the depreciation of your shares — and, more importantly, you unlock the forced remedies described below.

For the foreign shareholder, two practical points deserve emphasis at this stage. First, the limitation period for a damages claim based on these facts is, as a rule, three years from the day you knew or should have known the facts, so do not let months of transatlantic negotiation drift by without protecting your position in writing. Second, every step — formal notice (mise en demeure) by registered letter with acknowledgment of receipt, requests for meetings, settlement proposals — can be done from abroad through a French lawyer holding a written authority (pouvoir). Courts are accustomed to claimants who live overseas; what they require is a clean file, not your physical presence at every hearing.

B. How Do You Get a Judge to Break the Tie Urgently Without Dissolving the Company?

Dissolution kills the company; in most cases you want to save it and neutralise the blockage. French procedural law offers several emergency routes that work even — and especially — when you live abroad, because they are fast, largely written, and handled by lawyers without requiring the parties to attend in person.

The first route is the summary application to the president of the court (référé or accelerated proceedings). Article 835 of the Code of Civil Procedure provides that the president of the judicial court (tribunal judiciaire), even where a serious dispute exists, may order in summary proceedings the protective or restorative measures required either to prevent imminent damage or to put an end to a manifestly unlawful disturbance, and may grant an advance payment to a creditor where the existence of the obligation is not seriously disputable. A blocked essential decision that will make the company lose its main client within weeks is a textbook case of imminent damage. Through this route you can ask the judge to authorise the company to sign the contract despite the deadlock, to appoint a provisional administrator (administrateur provisoire) tasked with breaking the tie on defined decisions, or to order any conservatory measure the situation requires. The judge decides within weeks, sometimes days, on the basis of written submissions — a format that suits a claimant living on another continent.

The second route is the court-appointed expert valuation. Whenever the law, the articles of association (statuts) or a shareholders’ agreement refers to Article 1843-4 of the Civil Code to fix the price of a transfer of shares, any dispute over value is decided by an expert appointed by the parties or, failing agreement, by the president of the competent court ruling under the accelerated procedure on the merits, with no appeal possible. The expert must apply any valuation rules and methods laid down in the articles or in any agreement binding the parties. This mechanism is the workhorse of every forced buyout: when negotiation on price fails — as it almost always does between warring fifty-fifty partners — the judge appoints an independent expert whose valuation binds the parties. Note the important timing rule clarified by the Court of Cassation on 18 November 2020, no. 19-13.402: the current wording of Article 1843-4, resulting from the ordinance of 31 July 2014, applies to valuations ordered from 3 August 2014, the date of its entry into force, because the legal effects of a contract are governed by the law in force on the date they occur. In other words, do not rely on old commentaries describing the former version of the text; the expert now follows the valuation methods agreed by the parties where they exist.

The third route, often neglected by foreign shareholders, is prevention and settlement within the court system: court-supervised conciliation or mediation, and, where the company is already in financial difficulty because of the deadlock, the alert and prevention procedures of insolvency law. A judge who sees two shareholders willing to negotiate will frequently stay a dissolution claim to let mediation run its course. From abroad, video mediation sessions organised by Paris mediation centres are routine. A settlement signed at this stage — one partner buys the other out at the expert’s price, with payment staggered and secured — is almost always cheaper than two years of litigation followed by a court-ordered sale. Keep this option open even after you file: most deadlock cases settle once the expert’s draft valuation lands on the table.

Finally, a word on jurisdiction and practical Paris specifics, since most foreign-held French companies are registered in Paris and the Paris region. Commercial disputes between shareholders fall to the commercial court — in Paris, the Tribunal des activités économiques de Paris — or to the judicial court depending on the company form and the claim, and urgency applications go to the president of that court. Filings are made electronically by your lawyer, hearings for interim relief are short, and your personal attendance is not required. Decisions dissolving a company or appointing a liquidator are published and enforceable through the court registry, with the end of the company eventually advertised in the official civil and commercial announcements bulletin (Bulletin officiel des annonces civiles et commerciales, known as the BODACC). Knowing this geography matters: it means the entire emergency phase can be run from abroad, with one lawyer in Paris and a file built on emails, minutes and accounts.

II. How Do You Exit or End a Deadlocked French Company From Abroad: Buyout, Exclusion or Dissolution?

A. How Do You Force a Buyout or Impose an Exclusion in a French SAS From Abroad?

When the partnership is broken beyond repair, the rational outcome is usually separation: one partner buys the other’s shares, or the company buys out the departing partner. French law offers several doors to that outcome, and the SAS — the vehicle most foreign founders choose — is the most flexible of all, provided its articles were drafted with conflict in mind.

The starting point is the articles of association and any shareholders’ agreement (pacte d’associés). Well-drafted fifty-fifty documentation contains tie-break and exit clauses: a buy-or-sell clause (one partner names a price at which the other must either buy or sell, the so-called shotgun clause), a pre-emption right, a drag-along or tag-along right, or a simple undertaking to sell in defined deadlock events. These clauses are enforceable as contracts, and litigation about them turns on their precise wording rather than on company law. If you are still at the drafting stage for another venture, insist on a deadlock clause with a price mechanism and a timetable; if you are already blocked and have no such clause, the statute provides default tools, but they are narrower and slower. Dig out the pact today: many foreign founders signed one at incorporation, filed it away, and forgot that it contains the exact exit procedure they now need.

In a SAS, the statute expressly allows the articles to organise the forced transfer of shares. Article L. 227-16 of the Commercial Code provides that the articles may stipulate, under conditions they determine, that a shareholder can be required to sell shares, and may also suspend that shareholder’s non-pecuniary rights until the sale is completed. A companion provision, Article L. 227-17 of the Commercial Code, deals with changes of control of a corporate shareholder and allows the company to suspend voting rights and exclude that shareholder under conditions set by the articles. These are powerful weapons in a deadlock: if your partner’s obstruction matches a ground for exclusion defined in the articles — for example, competing activity, serious breach of the shareholders’ agreement, or persistent obstruction of essential decisions — the collective body of shareholders can vote the exclusion and force the sale of the partner’s shares.

But the procedure around exclusion is fenced with mandatory safeguards, and a decision of 29 May 2024, no. 22-13.158, states the most important of them, which you must know before voting anything. The Commercial Chamber held that, while the articles of a SAS may provide for the exclusion of a shareholder by collective decision, any term of the exclusion clause whose object or effect is to deprive the targeted shareholder of the right to vote on that proposal is deemed unwritten.

The combination of texts the Court relies on is Articles 1844 and 1844-10 of the Civil Code with Article L. 227-16 of the Commercial Code: every shareholder has the right to take part in collective decisions and to vote, and the articles may only depart from this in cases provided by law. Concretely, in a fifty-fifty SAS where the targeted partner must be allowed to vote on the own exclusion, the exclusion vote will tie — which is precisely why exclusion clauses in equal partnerships must be combined with an independent trigger, such as an expert determination or a buy-sell mechanism, rather than a simple majority vote. Check your clause today against this decision: if it says the excluded shareholder does not take part in the vote, that stipulation is deemed unwritten, and an exclusion pronounced on that basis can be annulled.

The price of the forced sale is governed by Article L. 227-18 of the Commercial Code: where the articles do not specify the price terms for shares transferred under an approval, exclusion or change-of-control clause, the price is fixed by agreement or, failing that, determined under Article 1843-4 of the Civil Code, and shares repurchased by the company must be sold within six months or cancelled. Two further provisions frame the drafting. Article L. 227-14 of the Commercial Code allows the articles to submit any share transfer to the prior approval (agrément) of the company, which lets you control who replaces your partner if the shares are sold to a third party. And Article L. 227-19 of the Commercial Code reserves certain clauses — including approval clauses under Article L. 227-14 and exclusion clauses under Article L. 227-16 — to collective decision taken under the conditions laid down in the articles, with unanimity required for others. The lesson for the blocked foreign shareholder is practical: map every applicable clause (approval, pre-emption, exclusion, price), check its adoption and voting conditions against Article L. 227-19, verify the voting rights of the targeted partner against the 2024 decision, and only then trigger the mechanism by formal notice served in France.

If your company is a limited liability company (société à responsabilité limitée, known as a SARL) rather than a SAS, the landscape is different and, for the party seeking exit, often simpler on one point. There is no statutory exclusion of a SARL shareholder comparable to Article L. 227-16: a majority cannot simply vote a minority — or an equal — out of a SARL. But Article L. 223-14 of the Commercial Code provides a powerful exit door: shares may be transferred to outsiders only with the consent of the majority representing at least half of the shares, the proposed transfer is notified to the company and to each shareholder, silence for three months counts as consent, and — crucially — if the company refuses consent, the shareholders must within three months acquire or procure the acquisition of the shares at a price fixed under Article 1843-4, unless the seller gives up the transfer. In a deadlock, this means you can present an outside buyer; if your partner organises a refusal of approval, the company side must buy you out at the expert’s price. The procedure has strict time limits that can be extended by court order up to six additional months, and expert fees fall on the company. For the foreign shareholder who simply wants out with a fair price, the SARL approval-and-buyout route is often the cleanest path, and it can be conducted entirely by correspondence and through counsel.

B. When Will a French Court Dissolve Your Company for Shareholder Disagreement?

Dissolution for disagreement (dissolution pour mésentente) is the nuclear option: the judge ends the company, a liquidator sells the assets, pays the creditors, and distributes any remainder. It destroys value — a business sold in liquidation rarely fetches its going-concern price — and judges know it. That is why the conditions are strict, and why filing for dissolution is often more useful as leverage toward a negotiated buyout than as an outcome to pursue to the end. Still, when nothing else works, the remedy exists, and its conditions are settled law.

The statutory basis is Article 1844-7, 5° of the Civil Code, which lists the causes that bring a company to an end and includes the early dissolution pronounced by the court at the request of a shareholder for justes motifs (proper grounds), in particular where a shareholder fails to perform obligations or where disagreement between shareholders paralyses the operation of the company. Two cumulative ideas emerge from the wording: a disagreement (mésentente) and a paralysis of the company’s functioning caused by it. Either element alone is not enough.

The classic statement comes from the Commercial Chamber on 21 October 1997, no. 95-21.156: disagreement between shareholders justifies dissolution only insofar as it has the effect of paralysing the operation of the company, and a court that refuses dissolution on the ground that paralysis was not demonstrated is upheld even when the shareholders hold equal shares, because disagreement alone, even between fifty-fifty partners, cannot by itself constitute a ground for dissolution. The lesson has not changed in nearly thirty years. To obtain dissolution you must show concrete paralysis: accounts that cannot be approved two years running, so that the company cannot distribute profits or reassure its bank; a manager who cannot be appointed or removed; investments or contracts systematically vetoed until the business stalls; or two rival managements issuing contradictory instructions to employees and banks. General meetings that end in shouting matches help your narrative, but what convinces a judge is the documented inability to take the decisions the company’s life requires.

The other side of the case law shows when dissolution is granted. On 16 October 2013, no. 12-26.729, the First Civil Chamber upheld the early dissolution of a professional partnership where the appeal court had sovereignly found that the permanent disagreement between the partners and the disappearance of all affectio societatis paralysed the operation of the company — even though a fallback voting mechanism in the articles allowed a minimal mode of operation, because key decisions still required a qualified majority that the disagreement made impossible. The reasoning is directly transferable to a fifty-fifty SAS or SARL: a company that can only just keep the lights on, but can no longer decide anything strategic, is paralysed in the legal sense. When you build your file from abroad, organise the evidence around this distinction: show the decisions the company needed, the votes that failed, and the consequences that followed (lost contracts, withdrawn credit lines, departures of key staff, tax or social-security filings made late).

Three defences regularly fail and should not deter you from filing. First, that the claimant provoked or contributed to the disagreement: courts look at the objective paralysis, and shared responsibility does not save a company that can no longer function — though it may affect costs and damages. Second, that dissolution would harm employees or creditors: the liquidation procedure precisely exists to pay creditors and protect staff claims, which rank preferentially. Third, that one partner offers to buy the other out at the last minute: judges often welcome this and may stay the case to let the buyout happen, which is a victory in substance even if the dissolution itself is never pronounced. In practice, a well-founded dissolution claim filed in Paris, supported by two years of blocked minutes and an auditor’s warning, settles in a large proportion of cases at the price the expert would have fixed — because both sides can do the arithmetic of what liquidation would cost them.

If dissolution is pronounced, the mechanics from that point are largely administrative and do not require you to relocate to France. The judgment appoints a liquidator, who realises the assets, pays the debts — including corporate tax, VAT balances and social charges verified with the tax and URSSAF authorities (URSSAF being the body that collects employers’ social-security contributions) — and files for the striking-off (radiation) of the company with the registry, with publication in the BODACC. Any employment contracts must be terminated following French dismissal law, with notice and severance paid from the liquidation proceeds. As the foreign shareholder, your role is to declare your claims in the liquidation, approve or challenge the liquidator’s accounts, and receive your share of any liquidation surplus, which is taxed in your hands according to your country of residence and the applicable tax treaty. Keep a French bank account open until the final distribution: closing it too early is a classic and costly mistake.

One final caution concerns timing and conduct during the case. Do not empty the company, divert its clients to a new structure, or stop paying its creditors while the dissolution claim is pending: such conduct exposes you to liability for mismanagement and can turn a sympathetic judge against you. Symmetrically, document any such conduct by your partner, because it feeds both the abuse-of-equality claim for damages and the demonstration of paralysis. Throughout, act as the shareholder who wants the company to survive or to be sold as a going concern, and let the other side own the blockage. Courts dissolve companies; they reward the party that behaved as a responsible owner.

Conclusion

A fifty-fifty deadlock in a French company is not a stalemate without rules; it is a legal situation with a defined sequence of exits. Start by characterising the blockage against the test of the Court of Cassation of 21 June 2023: an essential operation, a negative vote, and the sole pursuit of personal interests at your expense. Preserve the proof — minutes recording each vote, emails announcing each refusal, accounts showing what the blockage costs. Use the emergency routes to keep the company alive while the dispute lasts: summary proceedings before the court president to prevent imminent damage, and the court-appointed expert of Article 1843-4 to fix a buyout price when negotiation fails. Then choose your exit: enforce the tie-break and buy-sell clauses of your shareholders’ agreement, trigger the approval, pre-emption or exclusion mechanisms of your SAS articles while respecting the targeted partner’s right to vote as restated on 29 May 2024, use the approval-and-buyout door of Article L. 223-14 if the company is a SARL, or, where paralysis is demonstrated, ask the court for dissolution under Article 1844-7, 5° — remembering that disagreement alone, without paralysis, has never been enough since 1997. Each of these steps can be taken from abroad through counsel in Paris, before the courts of the company’s registered office, with publication and enforcement running through the registry and the BODACC. The partner who documents first, notifies properly and proposes a priced exit usually wins: either the buyout happens at a fair expert value, or the judge ends the deadlock. Do not wait for the company to bleed out before acting.